The UK Government wants the Acorn carbon capture and storage project in Aberdeenshire to succeed, a UK minister has said, after concerns were raised about changes to its funding mechanism.
The project was due to receive £200 million in grant funding from the UK Government, but Chancellor John Healey altered the commitment so the government would instead offer the same amount in loans or take an equity stake in the project.
Funding Change Raises Concerns
Scotland's First Minister John Swinney said he was "deeply concerned" about the changes to the funding mechanism. Acorn, which could support about 15,000 jobs at its peak, proposes storing emissions from across Scotland under the seabed of the North Sea.
UK Government energy minister Martin McCluskey said it had been necessary to "reprioritise" budgets to prioritise investing in defence, but that the UK Government wanted to support the project.
Minister Explains Rationale
Speaking on The Sunday Show on the BBC, Mr McCluskey said: "We awarded £200 million in grant funding at the last spending review. Some of that has already been drawn down by the developers, and the money that they've already drawn down remains in place. For the remainder, and for any future support, instead of it being through grant funding, it will be through loans and equities."
He explained the change was driven by two reasons: "Firstly, loans and equities are better value for the taxpayer. It means that perhaps we could choose to take a stake in that project, which would give a return to the taxpayer. But second, we've had to make some really difficult choices to reprioritise within budgets in order to fund the defence investment plan, which is obviously a priority for the Government."
Support for Acorn Continues
Mr McCluskey said the UK Government has had to "reprioritise" carbon capture and storage programmes across the UK, and that a number of programmes have actually been stopped, not just reprioritised in terms of loans and equities.
He added: "We are making sure that there is support there for the Acorn project. We want that project to succeed, and the developers who I'm speaking to later this week will come forward with proposals, and that funding is on the table."
